Recently, William Li, China's electric billionaire, has officially left the billionaires ranks after his shares of NIO electric car company plummeted.
The financier Wiliam Li, 44, was named "Elon Musk of China"According to Forbes, only in the first half of this year, the stock of the NIO electric car company fell by 58%, and the net asset value of founder William Li also fell by $ 1.2 billion in less than 4 months down to the current level of 457 million USD.
NIO confirmed to the media on Monday that their two senior executives have left the company, namely software director Li Zhuang and NIO's business supervisor in the United Kingdom. , Angelika Sodian.
Further details began to appear after NIO revealed that it recalled 4,804 thousand ES8 SUVs – its flagship electric car product after a series of complaints about battery igniting or fuming. The number of recalled products is already very large, up to about one-third of cars sold so far.
Analysts say that, besides safety issues, NIO faces bigger problems in the Chinese electric vehicle market. The Chinese government is cutting subsidies for electric vehicle manufacturers (EVs). Although the NIO can still withstand the size and value of a large market capitalization, this slip will reduce investor sentiment in electric vehicle manufacturing.
Ten Yong, an executive director of Shanghai-based L.E.K consulting firm, said: "Over the next 2 years, many new EV manufacturers, especially small brands, will not be able to compete for long. They will lack capital and have difficulties in product development, it is difficult to survive".
NIO's finances will be under even more pressure as Beijing cuts its subsidies and other companies in the EV industry by 2020 to encourage industry-wide innovation. NIO received about 67.5 thousand yuan (9,865 USD) for each ES8 model priced from 448 to 506 thousand yuan, but this subsidy will quickly be cut to 11.520 thousand yuan in the year. now on.
Chief financial officer Lois Hsieh in a conversation with analysts in May, pointed out the weakness in the macro economy combined with the slow development of the automotive market and cut subsidies. . Another spokesman said the key to NIO's current opportunity is "focus on business development, operational efficiency and long-term competitiveness. We believe that the company will achieve achievements with its market capitalization."
Investors say, smaller NIO companies are quite slow in mass production and profitable. Many small companies are rushing to find plans when investors are increasingly skeptical of the viability of their business model. According to Pitchbook statistics, between January and April of this year, Chinese private EV companies received only $ 783 million in funding, down sharply from $ 5.97 billion in the same period last year.
Ken Xu, a partner at investment firm Gobi Partners, said: "Investment in the industry is being cut, it is time for manufacturers to compete on cost and performance."As for the new manufacturers, he said:"Startups, without mass production experience, will not be competitive, and eventually, only 2 or 3 of them will be left with the industry."
Xpeng, an EV startup backed by Alibaba will be part of those startups. Brian Gu, president of Xpeng, said the company is actively raising capital, which has increased by $ 587 million compared to the previous one and brought the company valuation to $ 4 billion. Currently, the net worth of Xpeng founder, He Xiaopeng, is estimated at $ 1.3 billion.
Gu added "It is really a challenge when some of the industry's leading manufacturers are underperforming in the market and unintentionally put pressure on the industry's short-term prospects. We see investors being very cautious, making choices and paying attention to those who went first."
However, according to Yale Zhang, an analyst with AutoForesight consulting, analysts do not expect these startups to remove companies like BYD and Geely from the game, as these are companies. take better cost control measures and keep prices stable in the context of diminishing subsidies. Moreover, the competition will become more and more intense as soon as Tesla begins to produce and sell Model 3 in the Chinese market.
Mr. Teng Yong of consulting firm L.E.K added: "Large-scale and adaptable companies with local policies will continue to grow well. As for new companies, I don't think many of them are able to continue."
Tran Vu Duc